online grocery store in box Chief Executive Officer Chieh Huang said shoppers may have to get used to paying more to fill the fridge and pantry, especially if gasoline prices remain high.
Huang told CNBC “technical verificationHigher fuel prices are the main driver of higher costs in the company’s e-commerce business. Boxed sells groceries in bulk, which are shipped to homes and corporate offices. It went public last year through a merger with SPAC.
“We certainly don’t see price reduction anytime soon, but we’ll do what we can to keep them down,” he said, adding that the company is using its own software, a transportation management system and multiple carriers to keep prices low. .
The groceries are one of the main categories that increase in price, with inflation at its highest levels since the early 1980s. Food prices rose 1% in March and 8.8% in the past year, according to the Labor Department. Some of those more expensive foods include ground beef, rice, citrus fruits, and fresh vegetables.
Gasoline prices rose 18.3% in March, according to the Labor Department, making it more expensive to transport food across the country.
Those rising prices have inspired some retailers, including Boxed’s wholesale competitors like walmart-owned by Sam’s Club, bj wholesale Y Costco – for emphasize cheaper gasoline prices and highlight other advantages of gasoline.
Huang said he expects to see a “demand shift” in consumer buying patterns, which could include buying in bulk for better value.
Boxed, which started with pantry staples, has expanded into fresh foods. Huang said some of those items, like beef, have faced some of the toughest prices.
“There are certain things like that where there’s nothing we can do other than pass some of those costs on to those customers,” he said.
Huang said Boxed is finding a silver lining in bringing workers back to corporate offices.
Before the start of the pandemic, he said, about 25% of sales came from businesses, such as companies that stock snacks for employees. The business-to-business side of Boxed is growing faster, more lucrative and more complicated than the consumer business, Huang said.
“We’re definitely looking forward to, ‘Hey, what happens in a post-Covid world when people go back to the office not five days a week, but even one day a week, three days a week?'” said. . “It will force offices to start restocking their pantries.”